In the last six months, we have seen an explosion of public interest in all things AI (artificial intelligence), bidding up the stocks of companies directly (for example, Microsoft) and tangentially (e.g., Nvidia) linked to this technology. AI-mania has fueled the biggest stock-price rally in the tech sector since 2002. Out of the entire S&P 500 Index’s (SPX’s) 13-percent rise from January 1 through the end of May, AI-linked stocks accounted for 9.1 percentage points, capturing 70 percent of the index’s upside.
Fast-paced markets may bid AI up today, and the hype may die out months from now, but the new technology offers an exciting frontier from the financial sector’s point of view.
